Alibaba’s financial arm rumoured to be planning 2017 IPO
(23 August 2016 – China) Alibaba Group’s finance offshoot, Ant Financial, is considering an initial public offering (IPO) in the first half of 2017, sources have said.
Ant Financial was considering a dual listing in Hong Kong and Mainland China, however, the country’s restrictions on stock options are discouraging the firm from its original plans.
Ant Financial controls China’s biggest online payment service, Alipay, and was valued at IS$60 billion (A$79 billion) in the latest fundraising. A public listing is considered to be among the biggest ever for Hong Kong.
The firm choosing Hong Kong over its home country would also be an additional blow to China’s exchanges, which have been hit by volatility and tight regulations.
Companies listing in Hong Kong normally need a free float of at least 25 percent while those that meet certain size criteria can seek approval to sell as little as 15 percent, which for Ant Financial would equal around US$9 billion based current valuations.
China’s listing rules impose restrictions on IPOs by companies that have more than 200 existing shareholders, and also require all stock options to be vested in advance. Considering Ant Financial provides stock options as an incentive for workers, the firm would require special dispensation from the country’s regulators.
Ant Financial, controlled by Alibaba Chairman Jack Ma, completed a US$4.5 billion equity fundraising round valuing at US$60 billion, reports indicated in June.
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